Defense Claims Proof of Misconduct in Kosher Executive Case

March 22, 2016 06:15 PM
 
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Attorneys for imprisoned kosher meatpacking executive Sholom Rubashkin say they have found "overwhelming evidence" of prosecutorial misconduct that proves his 27-year prison sentence for money laundering is too harsh.

Rubashkin's attorneys filed newly obtained notes from a key meeting of government officials and legal affidavits Monday alleging prosecutors improperly interfered with the sale of Agriprocessors in Postville, Iowa, which was the nation's biggest kosher meat plant. Representatives of the U.S. Attorney's Office in Cedar Rapids threatened potential buyers that they would use forfeiture proceedings to seize the company's assets if Rubashkin's father, Aaron, or other relatives had a role operating the plant, several bidders said in affidavits.

Those threats depressed the sale price by millions because Aaron Rubashkin and other relatives were considered key figures in the kosher meat industry whose expertise was needed to operate the company, bidders said.

Agriprocessors sold for $8.5 million in 2009, even though its assets had been valued at $68 million. An investor had proposed a $40 million purchase but the bankruptcy trustee declined the offer, concluding that it could get more at auction. Potential buyers said they were scared off by the prosecutors' warnings about the Rubashkins, which the trustee had predicted would hurt the sale price.

The drop in value is significant because it left Agriprocessors' bank — the victim of Sholom Rubashkin's money laudering scheme — with a $27 million loss. That figure was used to calculate Rubashkin's sentence under federal guidelines. Had the plant sold for $40 million, Rubashkin would have faced a roughly three-year term under the guidelines, the filing claims.

Rubashkin, 56, has served nearly seven years behind bars after he was convicted in 2009 of financial fraud for bilking the plant's bank by submitting fake invoices that made the company's finances appear healthier than they were so that it could borrow more. His prosecution came after federal authorities raided the plant and arrested 389 illegal immigrants in 2008. Agriprocessors then filed for bankruptcy.

Prosecutors presented testimony at Rubashkin's sentencing that they had not imposed restrictions on the family's involvement in any business that purchased Agriprocessors.

Paula Roby, a lawyer for the bankruptcy trustee, testified that claims by bidders of a no-Rubashkins policy were false rumors, adding: "The grapevine can be a very unreliable thing." U.S. District Judge Linda Reade accepted Roby's testimony for purposes of calculating the loss, saying it discredited claims by defense witnesses that prosecutors' interference hurt the sale price.

But the new notes from a 2008 meeting between prosecutors and bankruptcy trustee representatives appear to bolster the defense's claim and undercut Roby, who was at the meeting.

"No Rubashkins is very important to us — non-negotiable," Assistant U.S. Attorney Richard Murphy said, according to handwritten notes taken by one of the trustee's lawyers, James Reiland. Asked by Roby whether there were any other non-negotiables, Murphy reiterated: "No involvement of Rubashkins from any standpoint (control, benefit)," the notes show.

The new evidence "proves the government knowingly presented false and misleading testimony and withheld exculpatory evidence," Rubashkin's attorneys wrote.

The U.S. Attorney's Office said Tuesday it's reviewing the filing, which is the latest attempt by Rubashkin's attorneys to seek his freedom.

The U.S. Supreme Court refused in 2012 to consider arguments that Rubashkin's sentence was too long for a nonviolent offender and that Reade should have recused herself because she met with investigators to plan the immigration raid. In January, Reade ruled that she would also hear Rubashkin's request for post-conviction relief, saying she had no conflict of interest.

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